exv4w4






Exhibit 4.4




WARRANT

TO PURCHASE SHARES OF SERIES C PREFERRED STOCK

OF

Novasonics, Inc.

A Delaware Corporation



THIS WARRANT HAS BEEN, AND THE SHARES OF SERIES C PREFERRED STOCK WHICH MAY BE PURCHASED PURSUANT
TO THE EXERCISE OF THIS WARRANT (THE “WARRANT SHARES”) WILL BE, ACQUIRED SOLELY FOR INVESTMENT AND
NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF. NEITHER THIS
WARRANT NOR THE WARRANT SHARES (TOGETHER, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES
ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS.




			
	 	 	 
	Warrant No.: SCW – 1
	 	Issuance Date: May 14, 2002





THIS CERTIFIES THAT, for value received, Pentech Financial Services, Inc. (the “Holder”) is
entitled to subscribe for and purchase from Novasonics, Inc., a Delaware Corporation (the
“Company”), 55,000 fully paid and nonassessable shares (as adjusted pursuant to Section 2 hereof)
(the “Warrant Shares”) of Series C Preferred Stock of the Company (“Series C Preferred Stock”) at
the purchase price of $1.75 per share (as adjusted pursuant to Section 2 hereof) (the “Exercise
Price”), upon the terms and subject to the conditions hereinafter set forth:




1. EXERCISE RIGHTS.




     (a) Cash Exercise. The purchase rights represented by this Warrant may be exercised
by the Holder at any time and from time to time during the term hereof, in whole or in part, by
delivery to the principal offices of the Company of this Warrant and a completed and duly executed
Notice of Cash Exercise, in the form attached as Exhibit “A” hereto, accompanied by payment to the
Company of an amount equal to the Exercise Price then in effect multiplied by the number of Warrant
Shares to be purchased by the Holder in connection with such cash exercise of this Warrant, which
amount may be paid, at the election of the Holder, by wire transfer or delivery of a certified
check payable to the order of the Company.



     (b) Net Issue Exercise.



          (i) In lieu of exercising the purchase rights represented by this Warrant on a cash basis
pursuant to Section 1(a) hereof, the Holder may elect to exercise such rights represented by this
Warrant at any time and from time to time during the term hereof, in whole or in part, on a
net-issue basis by electing to receive the number of Warrant Shares which are equal in value to the
value of this Warrant (or any portion thereof to be canceled in connection with such net-issue
exercise) at the time of any such net-issue exercise, by delivery to the principal offices of the
Company of this Warrant and a completed and duly executed Notice of Net-Issue Exercise, in the form
attached as Exhibit “B” hereto, properly marked to indicate (A) the number of Warrant Shares to be
delivered to the Holder in connection with such net-issue exercise, (B) the number of Warrant
Shares with respect to which the Warrant is being surrendered in payment of the aggregate Exercise
Price for the Warrant Shares to be delivered to the Holder in connection with such net-issue
exercise, and (C) the number of Warrant Shares which remain subject to the Warrant after such
net-issue exercise, if any (each as determined in accordance with Section 1(b)(ii) hereof).




 









 








          (ii) In the event that the Holder shall elect to exercise the rights represented by this
Warrant in whole or in part on a net-issue basis pursuant to this Section 1(b) the Company shall
issue to the Holder the number of Warrant Shares determined in accordance with the following
formula:




	 	 	 	 	 	 	 	 	 
	 

	 	X
	 	=
	 	Y (A-B)
	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	A	 	 






          X = the number of Warrant Shares to be issued to the Holder in connection with such net-issue
exercise.




          Y = the number of Warrant Shares purchasable under this Warrant or the portion of the Warrant
being exercised in connection with such net-issue exercise.




          A = the Fair Market Value of one share of Series C Preferred Stock.




          B = the Exercise Price in effect as of the date of such net-issue exercise (as adjusted
pursuant to Section 2 hereof.)




     (c) Fair Market Value. For purposes of this Section 1, the “Fair Market Value” of the
Series C Preferred Stock shall have the following meanings:



          (i) If the Series C Preferred Stock is not listed for trading on a national securities
exchange or admitted for trading on a national market system, then the Fair Market Value of the
Series C Preferred Stock shall be deemed to be the fair market value of Series C Preferred Stock as
determined in good faith from time to time by the Board of Directors of the Company (the “Board of
Directors”), and receipt and acknowledgement of this Warrant by the Holder shall be deemed to be an
acknowledgment and acceptance of any such determination of the fair market value of Series C
Preferred Stock by the Board of Directors as the final and binding determination of such fair
market value of purposes of this Warrant.




          (ii) In the event that the Warrant is being exercised for shares of the Company’s common stock
pursuant to Section 2.(a)(iv) hereof at the time the Company’s common stock is listed for trading
on a national securities exchange or admitted for trading on a national market system, or closing
bid and asked prices therefor are published in the Over-the-Counter Summary in the Western Edition
of The Wall Street Journal, then the per share Fair Market Value of the common stock for which the
Warrant is being exercised shall be deemed to be the closing price quoted on such national
securities exchange or such national market system, or if not so listed, the average of the closing
bid and asked prices for the Company’s common stock quoted on the Over-the-Counter Summary, for the
ten (10) trading days prior to the date of determination of Fair Market Value in accordance
herewith.




     (d) Additional Conditions to Exercise of Warrant. Unless there is a registration
statement declared or ordered effective by the Securities and Exchange Commission (the
“Commission”) under the Securities Act which includes the Warrant Shares to be issued upon the
exercise of the rights represented by this Warrant, such rights may not be exercised unless and
until:



          (i) the Company shall have received an Investment Representation Statement in the form
attached as Exhibit “C” hereto, certifying that, among other things, the Warrant Shares to be
issued upon the exercise of the rights represented by this Warrant are being acquired for
investment and not with a view to any sale or distribution thereof; and




          (ii) each certificate evidencing the Warrant Shares to be issued upon the exercise of the
rights represented by this Warrant shall be stamped or imprinted with a legend substantially in the
following form:




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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)
AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144 PROMULGATED
UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT DECLARED OR ORDERED EFFECTIVE
BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
COVERING SUCH SECURITIES, OR (ii) IN COMPLIANCE WITH RULE 144, OR
(iii) PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
OF SUCH SECURITIES THAT SUCH REGISTRATION OR RULE 144 COMPLIANCE IS
NOT REQUIRED UNDER THE SECURITIES ACT AS TO SUCH SALE, OFFER OF
SALE, PLEDGE, HYPOTHECATION OR OTHER DISTRIBUTION. THIS CERTIFICATE
MUST BE SURRENDERED TO THE ISSUER HEREOF OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE TRANSFER OF ANY INTEREST IN THE
SECURITIES REPRESENTED HEREBY.



     (e) Fractional Shares. Upon the exercise of the rights represented by this Warrant,
the Company shall not be obligated to issue fractional shares of Series C Preferred Stock, and in
lieu thereof, the Company shall pay to the Holder an amount in cash equal to the Fair Market Value
per share of Series C Preferred Stock immediately prior to such exercise multiplied by such
fraction (rounded to the nearest cent).



     (f) Record Ownership of Warrant Shares. The Warrant Shares shall be deemed to have
been issued, and the person in whose name any certificate representing Warrant Shares shall be
issuable upon the exercise of the rights represented by this Warrant (as indicated in the
appropriate Notice of Exercise) shall be deemed to have become the holder of record of (and shall
be treated for all purposes as the record holder of) the Warrant Shares represented thereby,
immediately prior to the close of business on the date or dates upon which the rights represented
by this Warrant are exercised in accordance with the terms hereof.



     (g) Stock Certificates. In the event of any exercise of the rights represented by
this Warrant, certificates for the Warrant Shares so purchased pursuant hereto shall be delivered
to the Holder within a reasonable time and, unless this Warrant has been fully exercised or has
expired, a new Warrant representing the Warrant Shares with respect to which this Warrant shall not
have been exercised shall also be issued to the Holder within such time.



     (h) Issue Taxes. The issuance of certificates for shares of Series C Preferred Stock
upon the exercise of the rights represented by this Warrant shall be made without charge to the
Holder for any issuance tax in respect thereof, provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the Holder of the Warrant.



2. ADJUSTMENT RIGHTS.




     (a) Right to Adjustment. The number of Warrant Shares purchasable upon the exercise
of the rights represented by this Warrant, and the Exercise Price therefor, shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:



          (i) Reclassifications. In the event of a reclassification of the Series C Preferred
Stock other than by stock split, subdivision, consolidation or combination thereof, the Company
shall execute a new Warrant, the terms of which provide that the holder of this Warrant shall have
the right to exercise the rights represented by such new Warrant, and procure upon such exercise
and payment of





3









 







the same aggregate Exercise Price then in effect, in lieu of the shares of Series C Preferred
Stock theretofore issuable upon exercise of the rights represented by this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon such
reclassification by a holder of an equivalent number of shares of Series C Preferred Stock. Such
new Warrant shall provide for adjustments, which are as equivalent as practicable to the
adjustments provided for in this Section 2. The provisions of this Section 2(a)(i) shall apply
with equal force and effect to all successive reclassifications of the Series C Preferred Stock.




          (ii) Stock Splits, Dividends, Combinations and Consolidations. In the event of a
stock split, stock dividend or subdivision of or in respect of the outstanding shares of Series C
Preferred Stock, the number of Warrant Shares issuable upon the exercise of the rights represented
by this Warrant immediately prior to such stock split, stock dividend or subdivision shall be
proportionately increased and the Exercise Price then in effect shall be proportionately decreased,
effective at the close of business on the date of such stock split, stock dividend or subdivision,
as the case may be. In the event of a reverse stock split, consolidation, combination or other
similar event of or in respect of the outstanding shares of Series C Preferred Stock, the number of
Warrant Shares issuable upon the exercise of the rights represented by this Warrant immediately
prior to such reverse stock split, consolidation, combination or other similar event shall be
proportionately decreased and the Exercise Price shall be proportionately increased, effective at
the close of business on the date of such reverse stock split, consolidation, combination or other
similar event, as the case may be.




          (iii) Mergers and Consolidations: Sales of Assets or Stock. In the event of (1) a
merger or consolidation of the Company with or into another corporation, limited liability company,
general or limited partnership, joint venture, association or other legal entity (other than a
merger or consolidation pursuant to which the Company is the surviving corporation and the
shareholders of the Company immediately preceding such merger or consolidation continue to own at
least fifty percent (50%) of the capital stock of the Company entitled to vote following the
closing of such merger or consolidation and which does not result in any reclassification of the
Warrant Shares issuable upon the exercise of the rights represented by this Warrant, or (2) the
sale of all or substantially all of the assets or capital stock of the Company), the Company, or
any successor corporation or other legal entity, as the case may be, shall execute a new Warrant,
the terms of which provide that the holder of this Warrant shall have the right to exercise the
rights represented by such new Warrant, and procure upon such exercise and payment of the same
aggregate Exercise Price then in effect, in lieu of the shares of Series C Preferred Stock
theretofore issuable upon exercise of the rights represented by this Warrant, the kind and amount
of shares of stock, other securities, money and property receivable upon such merger, consolidation
or sale of assets or capital stock by a holder of an equivalent number of shares of Series C
Preferred Stock. Such new Warrant shall provide for adjustments, which are as equivalent as
practicable to the adjustments provided for in this Section 2. The provisions of this Section
2(a)(iii) shall apply with equal force and effect to all successive mergers, consolidations and
sales of assets and capital stock of the Company.




          (iv) In the event of any merger, consolidation or sale of assets as described in paragraph
2.a.(iii) above, or the Company’s initial public offering, the Company shall have the option to
purchase this Warrant immediately prior to the closing date of such event for a per share price
equal to the greater of the Fair Market Value of a Warrant Share or five (5) times the Exercise
Price ($8.75); provided, however, that such option to purchase shall not be exercisable to the
extent that the Holder exercises this Warrant in connection with such merger, consolidation or
asset sale; provided further, however, that such option to purchase shall not be exercisable if in
connection with such merger, consolidation or asset sale all other warrants to acquire securities
of the Company will not expire and/or terminate, whether by their terms, complete exercise by the
holders thereof or the exercise of purchase rights by the Company. The Fair Market Value of each
Warrant Share shall be determined according to Section 1, above.




          (v) Conversion of Preferred Stock. Notwithstanding anything to the contrary contained
in this Warrant, in the event that all outstanding shares of the Company’s Series C Preferred Stock
are converted into Common Stock pursuant to the Company’s Certificate of Incorporation or





4









 







otherwise, this Warrant shall thereafter entitle the Holder to receive upon exercise that
number of shares of Common Stock into which the Warrant Shares otherwise issuable on exercise of
this Warrant would have been convertible at the time of such exercise, subject to the adjustments
of this Section 2.




     (b) Adjustment Notices. Upon any adjustment of the Exercise Price, and any increase
or decrease in the number of Warrant Shares subject to this Warrant, in accordance with this
Section 2, the Company, within sixty (60) days thereafter, shall give written notice thereof to the
Holder at the address of such Holder as shown on the books of the Company, which notice shall state
the Exercise Price as adjusted and, if applicable, the increased or decreased number of Warrant
Shares subject to this Warrant, setting forth in reasonable detail the method of calculation of
each such adjustment.



3. TRANSFER OF WARRANT.




     (a) Requirements for Transfer. This Warrant and the rights represented hereby are not
transferable, except in accordance with the conditions set forth in this Section 3. In order to
effect any transfer of all or a portion of this Warrant or the Warrant Shares, the Holder hereof
shall deliver to the Company a completed and duly executed Notice of Transfer, in the form attached
as Exhibit “D” hereto.



     (b) Additional Conditions to Transfer of Warrant. Unless there is a registration
statement declared or ordered effective by the commission under the Securities Act which includes
this Warrant, the Warrant may not be transferred unless and until:



          (i) the Company shall have received an Investment Representation Statement, in the form
attached as Exhibit “E” hereto, certifying that, among other things, this Warrant is being acquired
for investment and not with a view to any sale or distribution thereof, and




          (ii) the Company shall have received a written notice from the Holder which describes the
manner and circumstances of the proposed transfer accompanied by a written opinion of Holder’s
legal counsel, in form and substance reasonably satisfactory to the Company, stating that such
transfer is exempt from the registration and prospectus delivery requirements of the Securities Act
and all applicable state securities laws.




     (c) Competitor of the Company. Notwithstanding Sections 3(a) and 3(b) above, this
Warrant is not transferable, whether by sale, pledge or other disposition, voluntarily or by
operation of law or otherwise, to any competitor of the Company (as determined in good faith by the
Board of Directors of the Company).


4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and
warrants to the Holder as follows:




     (a) This Warrant has been duly authorized and validly executed and delivered by the Company
and constitutes a valid and legally binding obligation of the Company enforceable against the
Company in accordance with its terms.



     (b) The Warrant Shares have been duly and validly authorized and reserved for issuance by the
Company upon the exercise of the rights represented by this Warrant and, when issued upon the
exercise of such rights in accordance with the terms and conditions hereof, the Warrant Shares will
be (A) duly authorized and validly issued, fully paid and nonassessable shares of Series C
Preferred Stock, (B) free from all preemptive rights, rights of first refusal or first offer,
taxes, liens, charges or other encumbrances with respect to the issuance thereof by the Company,
and (C) free of any restrictions on the transfer thereof other than restrictions on transfer
provided for herein or under applicable federal and state securities laws. At all times during the
term hereof, the Company shall have authorized and reserved for issuance a sufficient number of
shares of Series C Preferred Stock to provide for the exercise of the rights represented by this
Warrant.



5









 





     (c) The due execution and delivery of this Warrant are not, and the issuance of the Warrant
Shares upon the exercise of the rights represented by this Warrant in accordance with the terms
hereof will not, conflict with the Certificate of Incorporation or Bylaws of the Company, each as
amended to the date of issuance hereof.



     (d) The Company acknowledges that this Warrant does not constitute security for the repayment
of any lease, loan or other indebtedness due from the Company to the Holder.


5. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder hereby represents and warrants
to the Company as follows:




     (a) This Warrant is being acquired for such Holder’s own account, for investment and not with
a view to, or for resale in connection with, any distribution or public offering thereof within the
meaning of the Securities Act. Upon the exercise of the rights represented by this Warrant, the
Holder shall, if so requested by the Company, confirm in writing, in a form reasonably satisfactory
to the Company, that the Warrant Shares issuable upon the exercise of such rights are being
acquired for investment and not with a view toward distribution or resale thereof.



     (b) The Holder understands that the Warrant and the Warrant Shares have not been registered
under the Securities Act by reason of their issuance in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act pursuant to Section 4(2) thereof and
Regulation D thereunder, and that such Warrant and the Warrant Shares, as the case may be, must be
held by the Holder indefinitely, and therefore, that the Holder must bear the economic risk of such
investment, unless a subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration requirements. The Holder further understands that the Warrant Shares
have not been qualified under the California Securities Law of 1968 (the “California Law”) by
reason of their issuance in a transaction exempt from the qualification requirements of the
California Law pursuant to Section 25102(f) thereof, which exemption depends upon, among other
things, the bona fide nature of such Holder’s investment intent expressed herein.



     (c) The Holder has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the purchase of this Warrant and the Warrant Shares
and of protecting its interests in connection therewith.



     (d) The Holder is able to bear the economic risk of the purchase of the Warrant Shares
pursuant to the terms of this Warrant.



     (e) Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D, as
presently in effect.


6. NO SHAREHOLDER RIGHTS. The Holder of this Warrant (and any transferee hereof) shall not
be entitled to vote on matters submitted for the approval or consent of the shareholders of the
Company or to receive dividends declared on or in respect of shares of Series C Preferred Stock, or
otherwise be deemed to be the holder of Series C Preferred Stock or any other capital stock or
other securities of the Company which may at any time be issuable upon the exercise of the rights
represented hereby for any purpose, nor shall anything contained herein be construed to confer upon
the Holder (or any transferee hereof) any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted for the approval or
consent of the shareholders, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issuance of stock, reclassification of stock, merger or consolidation,
conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription
rights or otherwise until this Warrant shall have been exercised and the Warrant Shares issuable
upon the exercise of the rights represented hereby shall have become deliverable as provided
herein.




6









 







7. REGISTRATION RIGHTS. The Holder shall be entitled to participate in piggyback
registrations as set forth in Section 5.2 of that certain Amended and Restated Investor Rights
Agreement dated as of January 14, 2002, as amended, to the same extent as the holders of the
Company’s Registrable Securities, as defined therein.



8. EXPIRATION OF WARRANT. This Warrant shall expire, and the rights represented hereby may
no longer be exercised on the close of business on the tenth anniversary of the date of issuance
hereof.



9. LOCK-UP AGREEMENT. The Holder hereby agrees that, upon request of the Company or the
managing underwriter of a public offering of any securities of the Company, such Holder shall not
sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of
all or any portion of the Warrant Shares without the prior written consent of the Company or the
managing underwriter, as the case may be, for such period of time (not to exceed one hundred eighty
(180) days from the date upon which the registration statement relating to such public offering is
declared or ordered effective by the Securities and Exchange Commission) as may be requested by the
Company or the underwriters, as the case may be.



10. MISCELLANEOUS.




     (a) Governing Law. This Warrant is being delivered in the State of California, and
shall be construed and enforced in accordance with and governed by the laws of such State. The
parties expressly stipulate that any litigation under this Warrant shall be brought in the State
courts of the County of Santa Clara, California, or in the United States District Court for the
Northern District of California. The parties agree to submit to the jurisdiction and venue of such
courts.



     (b) Notice Procedures. Any written notice by the Company required hereunder shall be
made by hand delivery or first class mail, postage prepaid, address to the Holder at the address
set forth on the books of the Company.



     (c) Successors and Assigns. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Company and of the Holder or Holders of
this Warrant and the Warrant Shares issued or issuable upon the exercise of the rights represented
by this Warrant.



     (d) Entire Agreement. This Warrant constitutes the full and entire understanding and
agreement between the parties with respect to the subject matter hereof and supersedes in their
entirety any prior or contemporaneous agreements by and between the Company and the Holder with
respect to such matters.



     (e) Further Assurances: No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through any other means, directly or indirectly, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant and shall at all times in
good faith assist in the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holder of this Warrant against
impairment. The Company shall at no time close its transfer books against the transfer of this
Warrant or of any Warrant Shares issued or issuable upon the exercise of the rights represented by
this Warrant in any manner, which interferes with a timely exercise of such rights.



     (f) Lost Warrant. Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company at the Holder’s expense shall execute and deliver to the Holder, in lieu
thereof, a new Warrant of like date and tenor.



7









 





     (g) Amendments. This Warrant and any provision hereof may be amended, waived or
terminated (either generally or in a particular instance, retroactively or prospectively and for a
specified period of time or indefinitely) only by a written instrument signed by the Company and
the Holder, or, in the event of any partial transfer of the rights represented by this Warrant, the
Holders of rights to purchase more than fifty percent (50%) of the Warrant Shares issuable upon
exercise of the rights represented by this Warrant, and with the same consent the Company may enter
into a supplementary agreement for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Warrant or the Warrants, as the case may be,
provided, however, that no such amendment, waiver, termination or supplemental agreement shall
reduce the aforesaid percentage which is required for consent to any amendment, waiver, termination
or supplemental agreement without the consent of all of the Holders of the rights represented by
this Warrant.



8









 




IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer.




Issued this 14th day of May, 2002.




	 	 	 	 	 	 	 
	 	 	Novasonics, Inc.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ S. Zafar Hamdini	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	S. Zafar Hamdini	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 CEO/President	 	 






	 	 	 	 	 
	Acknowledged and Accepted:	 	 
	 
	 	 	 	 
	PENTECH FINANCIAL SERVICES, INC.

A California corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Norman H. Nelson
 

	 	 
	 
	 	 	 	 
	Name:

	 	Norman H. Nelson	 	 
	 
	 	 	 	 
	Title:

	 	President & COO	 	 






 









 








EXHIBIT A




NOTICE OF CASH EXERCISE




	 	 	 
	To:

	 	Novasonics, Inc.
	 

	 	1061 Terra Bella Avenue
	 

	 	Mountain View, CA 94043






     1. The
undersigned hereby elects to purchase _______ shares of Series C Preferred Stock of
Novasonics, Inc., a Delaware corporation (the “Company”), pursuant to the terms of Warrant No SCW
— 1, issued on May 14, 2002, to and in the name of Pentech Financial Services, Inc., a copy of
which is attached hereto (the ‘Warrant”), and tenders herewith full payment of the aggregate
Exercise Price for such shares in accordance with the terms of the Warrant.



     2. Please issue a certificate or certificates representing said shares of Series C Preferred
Stock in such name or names as specified below:



Pentech Financial Services, Inc.

a California corporation

310 West Hamilton Avenue, Suite 202

Campbell, CA 95008




     3. The undersigned hereby represents and warrants that the aforesaid shares of Series C
Preferred Stock are being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof, and that the undersigned has
no present intention of distributing or reselling such shares and all representations and
warranties of the undersigned set forth in attached Warrant are true and correct as of the date
hereof. In support thereof, the undersigned has executed an Investment Representation Statement,
in the form attached as Exhibit C to the Warrant, concurrently herewith.



	 	 	 	 	 	 	 
	 	 	Pentech Financial Services, Inc.

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





 









 






EXHIBIT B




NOTICE OF NET-ISSUE EXERCISE




	 	 	 
	To:

	 	Novasonics, Inc.
	 

	 	1061 Terra Bella Avenue
	 

	 	Mountain View, CA 94043






     1. The
undersigned hereby elects to purchase _______ shares of Series C Preferred Stock of
Novasonics, Inc., a Delaware corporation (the “Company”), on a net-issue basis pursuant to the
terms of Warrant No. SCW—1, issued on May 14, 2002, to and in the name of Pentech Financial
Services, Inc., a copy of which is attached hereto (the ‘Warrant”).



     2. Net-Issue Information:



     (a) Number of Shares of Series C Preferred Stock to be Delivered:                     



     (b) Number of Shares of Series C Preferred Stock Surrendered:                     



     (c) Number of Shares Remaining Subject to Warrant:                                         



     3. Please issue a certificate or certificates representing said shares of Series C Preferred
Stock in such name or names as specified below:



Pentech Financial Services, Inc.

310 West Hamilton Avenue, Suite 202

Campbell, CA 95008




     4. The undersigned hereby represents and warrants that the aforesaid shares of Series C
Preferred Stock are being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof, and that the undersigned has
no present intention of distributing or reselling such shares and all representations and
warranties of the undersigned set forth in attached Warrant are true and correct as of the date
hereof. In support thereof, the undersigned has executed an Investment Representation Statement,
in the form attached as Exhibit C to the Warrant, concurrently herewith.



	 	 	 	 	 	 	 
	 	 	Pentech Financial
Services, Inc,

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 






 









 








EXHIBIT C




INVESTMENT REPRESENTATION STATEMENT




	 	 	 
	PURCHASER:

	 	Pentech Financial Services, Inc.
	 
	 	 
	SELLER: Novasonics, Inc.
	 
	 	 
	COMPANY: Novasonics, Inc.
	 
	 	 
	SECURITY: Series C Preferred Stock Issued Upon The Exercise Of Warrant No
                     Issued On                     , 2002.
	 
	 	 
	AMOUNT:                      SHARES
	 
	 	 
	DATE:                                         






     The undersigned hereby represent and warrants to Novasonics, Inc., a Delaware corporation (the
“Company”), as follows:



     1. The undersigned is aware of the business affairs, financial condition and results of
operations of the Company and has acquired sufficient information about the Company to reach an
informed and knowledgeable investment decision to acquire the Securities. The undersigned is
purchasing the Securities for its own account for investment purposes only and not with a view to,
or for the resale in connection with, any “distribution” thereof for purposes of the Securities Act
of 1933, as amended (the “Securities Act”).



     2. The undersigned understands that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among
other things, the bona fide nature of its investment intent as expressed herein. The undersigned
understands that, in the view of the Securities and Exchange Commission (the “Commission”), the
statutory basis for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold the Securities for the minimum capital gains period specified
under tax statutes, for a deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one year or any other fixed period in the future.



     3. The undersigned further understands that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from registration is
otherwise available. In addition, the undersigned understands that the certificate evidencing the
Securities will be imprinted with a legend, which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of counsel for the Company.



     4. The undersigned is familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions.



     5. The undersigned further understands that in the event all of the applicable requirements of
Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or
some other registration exemption will be required; and that, notwithstanding the fact that Rule
144 is not exclusive, the Staff of the Commission has expressed its opinion that persons proposing
to sell private placement securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and their respective
brokers who participate in such transactions do so at their own risk.



 









 





     6. The undersigned is an “accredited investor” within the meaning of Rule 501 of Regulation D,
as presently in effect.



     7. The undersigned hereby agrees that, upon request of the Company or the managing underwriter
of a public offering of any securities of the Company, such undersigned shall not sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose of all or any
portion of the Securities without the prior written consent of the Company or the managing
underwriter, as the case may be, for such period of time (not to exceed one hundred eighty (180)
days from the date upon which the registration statement relating to such public offering is
declared or ordered effective by the Securities and Exchange Commission) as may be requested by the
Company or the underwriters, as the case may be.



	 	 	 	 	 	 	 
	 	 	Pentech Financial Services, Inc,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 






 









 








EXHIBIT D




NOTICE OF TRANSFER




     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                     the right represented by Warrant No. SCW—1, issued on May 14, 2002, to and in
the name of Pentech Financial Services, Inc., to purchase
________  shares of Series C Preferred
Stock of Novasonics, Inc., a Delaware corporation (the “Company”), a copy of which is attached
hereto (the ‘Warrant”), and appoints                      as attorney-in-fact to transfer such
right on the books of the Company with full power of substitution in the premises.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Pentech Financial Services, Inc.,
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	a California corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform in all respects to name of
the Holder as set forth on the face of the Warrant)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	310 West Hamilton Avenue, Suite 202

Campbell, CA 95008	 	 






	 	 	 
	Signed in the presence of:
	 	 
	 
	 	 
	 
	 	 
	 


	 	 







 









 








EXHIBIT E




INVESTMENT REPRESENTATION STATEMENT




	 	 	 
	TRANSFEROR:

	 	Pentech Financial Services, Inc., a California corporation
	 
	 	 
	TRANSFEREE:

	 	                                        
	 
	 	 
	COMPANY:                                          
	 
	 	 
	COMPANY:  Novasonics, Inc.
	 
	 	 
	SECURITY:   WARRANT NO ___, ISSUED ON                     ,  2002
	 
	 	 
	AMOUNT:                       SHARES
	 
	 	 
	DATE:                      






     The undersigned hereby represents and warrants to Novasonics, Inc., a Delaware corporation
(the “Company”), as follows:



     1. The undersigned is aware of the business affairs, financial condition and results of
operations of the Company and has acquired sufficient information about the Company to reach an
informed and knowledgeable investment decision to acquire the Securities. The undersigned is
purchasing the Securities for its own account for investment purposes only and not with a view to,
or for the resale in connection with, any “distribution” thereof for purposes of the Securities Act
of 1933, as amended (the “Securities Act”).



     2. The undersigned understands that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among
other things, the bona fide nature of my investment intent as expressed herein. The undersigned
understands that, in the view of the Securities and Exchange Commission (the “Commission”), the
statutory basis for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold the Securities for the minimum capital gains period specified
under tax statutes, for a deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one year or any other fixed period in the future.



     3. The undersigned further understands that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from registration is
otherwise available. In addition, the undersigned understands that the certificate evidencing the
Securities will be imprinted with a legend, which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of counsel for the Company.



     4. The undersigned is familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions.



     5. The undersigned further understands that in the event all of the applicable requirements of
Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or
some other registration exemption will be required; and that, notwithstanding the fact that Rule
144 is not exclusive, the Staff of the Commission has expressed its opinion that persons proposing
to sell private placement securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from
registration is available for such



 









 







offers or sales, and that such persons and their respective brokers who participate in such
transactions do so at their own risk.



     6. The undersigned is an “accredited investor” within the meaning of Rule 501 of Regulation D,
as presently in effect.



     7. The undersigned hereby agrees that, upon request of the Company or the managing underwriter
of a public offering of any securities of the Company, such undersigned shall not sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose of all or any
portion of the Securities without the prior written consent of the Company or the managing
underwriter, as the case may be, for such period of time (not to exceed one hundred eighty (180)
days from the date upon which the registration statement relating to such public offering is
declared or ordered effective by the Securities and Exchange Commission) as may be requested by the
Company or the underwriters, as the case may be.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Transferee:	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Title: